myths about the federal reserve

[Travlyr]

Travlyr

How did you adjust for inflation there, with the CPI or some other measure?

I think you're clearly wrong, but I want to give you a chance to prove me wrong.

In 1964, a silver dollar = $1 FRN; In 2011, a silver dollar = $26.72 FRN.

 

[Dr.3D]

In 1964, a silver dollar = $1 FRN; In 2011, a silver dollar = $26.72 FRN.

This is true. I remember as a kid, going to the gasoline station with a one gallon container to get fuel for my lawn mower. One FRN now wouldn't even fill that container to half way. With a silver dollar, it would be filled to the top and I would get change. There is no need to take in for inflation, as that is the reason the FRN isn't worth as much as it was back in 1960.

 

[ababba]

In 1964, a silver dollar = $1 FRN; In 2011, a silver dollar = $26.72 FRN.

You just gave the definition of nominal, not real.

 

[Carson]

They rip us all off before you ever have a chance to save.

Say you start with a million and in thirty years the counterfeiters have it devalued by ten times. Then you spend the money you saved for your future and it will buy you a hundred thousand dollars.

I sure you can see that.

Say you earned a million dollars over that thirty year period. You've still been taken to the cleaners. Maybe by not as much but incrementally it adds up to robbery.

Has anyone ever told you that the stock market went up today because the money people are buying it with isn't worth as much now?

Don't forget those capital gains you owe on your false prifits.

 

[ababba]

Bull shit! People should be able to save without being robbed. They should also be able to invest as they wish without having to be forced to do so to keep their money from becoming less valuable. A good currency retains it's value over time, it doesn't slowly become less valuable.

As it is right now, no one is free to save their money without changing it over to gold and silver, then surprise of all surprises, some asshole decided if they did that, they should have to lose some of what they saved through a capital gains tax. It's a rigged system and it's rigged to keep people in poverty.

There are a multitude of ways to save that yield returns greater than the rate of inflation. Money market accounts, corporate bonds, treasury bills, inflation indexed bonds, inflation indexed annuities etc. Almost all of these can be directly converted to and from currency at any point in time instantly. There are very few legal restrictions on the types of bonds or investment vehicles that can be created.

People respond to the fact that money yields a zero interest rate while other investments yield positive interest rates. This seems good to me because the investment is channeled into productive resources for the most part instead of being used to hoard money.

 

[low preference guy]

There are a multitude of ways to save that yield returns greater than the rate of inflation. Money market accounts, corporate bonds, treasury bills, inflation indexed bonds, inflation indexed annuities etc. Almost all of these can be directly converted to and from currency at any point in time instantly. There are very few legal restrictions on the types of bonds or investment vehicles that can be created.

People respond to the fact that money yields a zero interest rate while other investments yield positive interest rates. This seems good to me because the investment is channeled into productive resources for the most part instead of being used to hoard money.

right. like gambling in the stock market in crashing it, while losing the money of savers at the same time. what a great idea. very productive

also, people don't "hoard money" when they save. when interest rates are high, they put it in the bank, and that's loaned out to business who invest and grow the economy.

 

[ababba]

right. like gambling in the stock market in crashing it, while losing the money of savers at the same time. what a great idea. very productive

also, people don't "hoard money" when they save. when interest rates are high, they put it in the bank, and that's loaned out to business who invest and grow the economy.

The stock market over time has had returns dramatically exceeding inflation. I'm not talking about speculative rapid buying and selling, but buying and holding over a lifetime, maybe slowly buying more over time. We live in a free market, where productive investment is funded by capital like stocks, bonds and private equity. This is a good thing even if there is risk involved. The stock market allows people to group their investments together so that a bunch of small investors can fund giant investment projects.

The people that put the money in the bank can put it in a money market fund. You can draw checks on a money market fund. You can convert it to currency relatively quickly. It earns a higher return than the rate of inflation. Bank accounts often pay lower interest rates than money market accounts for several reasons. One is that the bank is providing a service, namely checking, atms and other transactions. Another is that bank account balances are often very small, and there are fixed costs for the bank to run each account.

 

[Carson]

Bonds? That is one of those pieces of paper they print up promising, when the time comes, to print up enough money to pay you back plus interest.

Some people see a problem with this.

 

[ababba]

Bonds? That is one of those pieces of paper they print up promising, when the time comes, to print up enough money to pay you back plus interest.

Some people see a problem with this.

If you don't want government bonds, try corporate bonds, international bonds or annuities by insurance companies. I think government bonds are less likely to default but suit yourself.

 

[low preference guy]

If you don't want government bonds, try corporate bonds, international bonds or annuities by insurance companies. I think government bonds are less likely to default but suit yourself.

Of course, governments have enough guns and thugs to steal from people. But the criminal enterprise at some point will collapse and it will pay back in worthless paper.